Jerome Ntibarekerwa, Secretary General, PMAESA PAN-AFRICAN PORT COOPERATION CONFERENCE DJIBOUTI 15 th - 18 th Dec 2008 PMAESA PORTS: CHALLENGES & OPPORTUNITIES

Introduction Who we are? Port Management Association of Eastern & Southern Africa (PMAESA) is a regional grouping of ports in the eastern and southern Africa with membership composed of state representatives and private sector from: Port Authorities Maritime transport departments Port Operators Maritime regulators

PMAESA Member States

Introduction What we do Established in 1973 under the auspices of the UNECA with the following objectives among others: Offer platform to exchange ideas and information where members can interface with one another in transport and trade facilitation Assist port development by enhancing productivity and service delivery and trade facilitation; Establish linking from ports to transport Corridors; To assist our ports /maritime members to implement IMO conventions Establish and maintain relations with other development partners and transport authorities for the study of matters beneficial to members

Ports are important Ports in developing countries: –represent a key asset for economic development –serve landlocked countries – key components of regional trade corridors –play an important role as interface between sea and land transport systems Inefficiencies impact trade competitiveness Congestion at ports –an increasing problem –affects shipping schedules contributes to further congestion Constraints to capacity expansion: –Lack of scope to increase capacity –Weak inland transport links

Factors driving growth External Factors: –Strong GDP expansion –Integration of regional economies with Asian suppliers –Political stability Internal factors: –Privatization of ports sector - increased investment –Improved shipping links with Asia –Increased ship size and transshipment –Terminal productivity increases Above factors are increasing pressure on port capacity

7 Global container port capacity has reached critical levels North America 92% / 86% Central America & Carribean 82% / 73% South America 111% / 102% Africa 79% / 71% South Europe 82% / 78% North Europe 80.5% / 73.2% Middle East 98% / 89% South East Asia 108% / 91% Oceania 105% / 93% Subcontinent 87% / 57% Far East 109% / 105% Eastern Europe 92% / 73% Source : World Bank, SSATP Global Total 99% / 89%

State of the Port Sector Port congestion regions Courtesy of Michel Donner, World Bank

Measures to address port efficiency and productivity  Acquiring more spaces for port activities  Purchase of new equipment  Using ICDs  Developing IT systems and free port activities  Restructuring the management model  Improving safety, security and environment protection to meet international standards

OUR PORTS KEY CHALLENGES  Acquiring more spaces for port activities  Infrastructure development :Purchasing of new equipments  Using ICDs  Developing IT systems and free port activities  Restructuring the management model  Improving safety, security and environment protection to meet international standards

Challenges with Growing Demand Key ports in the Eastern and Southern Region:  Kenya Ports Authority  Tanzania Ports Authority  South Africa, Transet NPA  Djibouti port, DP World  Sudan port Cooperation  Mauritius Ports Authority  Seychelles Ports Authority

Challenges with Kenya Ports Authority – KPA  The rapid increase of traffic is likely to continue  The container Dwell time is yet to be reduced  The hinterland rail connections remain inefficient  More dependence on road mode of transport with 3 axle road rule constraint for hauliers  Long documentation procedures  Inadequate capacity to handle the forecasted cargo volumes.

Challenges with Kenya Ports Authority (Cont...)  The exploration of Oil in Lamu District  The Regional Integration expectations : EAC/COMESA Customs Union expected positive results  The Transport Sector Reforms : Concession of RVR, Rehabilitation of major roads links to other countries

Challenges with Djibouti Ports The throughput in TEU has grown by 31% in 2007 while the General Cargo grew by 44%; The stripping operations by Freight Forwarders remain very slow; The yard is occupied at 95%; There is a high level of stacking ( up to 5 highs); The number of full and empty containers is very high; The port is facing many difficulties linked with Ethiopian bureaucracy as 85% of the total handled cargo is for Ethiopia ( Customs clearance taking more than 3 weeks, cargo financed by L/C).

Challenges with Tanzania Ports Authority- TPA- The insufficient container storage space The long container dwell time (has reached 25 days in Aug.2008) The rapid increase of container traffic and The low performance of inland modes of transport especially the rail lines with very low availability of wagons and locomotives.

Challenges with Tanzania Ports Authority (Cont.)  More investment to increase container terminals capacity and Inland Depot  Improve efficiency and productivity within the existing port infrastructure and equipment  Continue to involve private sector in port operations and concessioning which will improve port development

Challenges with Mauritius Ports Authority The current port charges are high: there is need to assess adequacy of current charges to sustain Investments The low level of connectivity of major shipping lines The 15% corporate tax imposed on free port companies to be dropped at zero rate ( expected on 1 st July 2009) Business environment yet to be friendly in regards with regulations, procedures …

Challenges in South Africa (TRANSNET NPA) Responding to the opportunities presented by : 1.Growth in global economic activity - increase inter/intra African trade –Link industrial and mining sector activity to markets –BRIC phenomena – Alternate logistic & hub – South S trade –Regional economic integration – Transport corridor development –Intermodal harmonisation to improve regional supply chain and reduce logistics costs Focus on Time, Cost & Skills

Challenges with Sea Port Corporation – Sudan  To cope with technological advances in maritime industries  To face the political and economical challenges internally and externally: Requirements of WTO,COMESA agenda  Exploration of Sudanese Oil,  To handle economic activities logistics after Peace Agreements in Sudan.

Comparative Review with key PMAESA Ports In terms of :  Cargo handling performance  Container handling performance  Transit traffic  Transshipment traffic  Port regulation model  Other safety and security arrangements

Cargo handling performance (DWT “000”) Port Authority AVG.GR OWTH RATE DJIBOUTIPAID4,4095,8685,5945,4355,4896.6% KENYAKPA10,56411,93112,92113,28114,4028.1% MAURITI USMPA5,5525,5435,8165,6025,6860.6% REUNION PORT REUNION3,1953,4353,8913,7653,9475.6% SOUTH AFRICANPA189, , ,751173,555179, % SUDANSPC4,3885,0485,5757, % TANZANI ATPA4,7245,4815,4166,8647,2917.9% Note: Figures shown are in calendar year Source: PMAESA

Cargo handling Ports in South Africa handle more cargo than other in the region They are followed by Mombasa, DSM, Mauritius and Djibouti.

Container handling (TEUs) CountryPort2002/032003/042004/052005/062006/07 AVG.GROW TH RATE KenyaMombasa337,568418,465434,538454,437526, % Tanzania Dar es Salaam166,253205,044255,578287,948256, % South Africa Richards Bay4,6945,5424,9813, % Durban1,313,2901,603,9241,690,8851,955,8032,334, % East London43,57958,63742,54541,8361.8% Port Elizabeth278,145282,865340,144370,849407, % Cape Town ,529609,572736,943764, %

Container Handling Durban and Cape Town are the biggest container handling ports Mombasa is the 3 rd while DSM is the sixth position

Transshipment Mombasa and DSM competing for the business with Kenya holding a leading share up to 2003 Trend reversed following to logistical problems associated to over-utilization capacity. Still the 2 ports remain behind regional Hubs of Durban, Port Louis and lately Djibouti

Transshipment Traffic (TEUs) CountryPort Djibouti 29,53236,22466,605105,3614,822 KenyaMombasa17,66725,76927,36849,60534,245 Tanzania Dar es Salaam3,96012,42324,86637,24656,249 South Africa Durban331,736299,806358,841334,071324,649 East London1,2802,2983, Port Elizabeth11,44426,89853,10825,71537,362 Cape Town55,836106,614110,96991,57190,411 MauritiusPort Louis6,8307,74872,186204,564200,632 ReunionPort Reunion8,0338,8767,7429,10314,469 Source: PMAESA Note: Figures shown are in calendar year

Container handling Performance Avg/hourHandling Systemmanagement DSM20Container Gantries concessioned Djibouti17Container Gantries concessioned Mombasa10Container Gantries Not concessioned Port Sudan8Container Gantries Not Concessionned Port Louis14Container Gantries concessioned

Current Port regulation Most PMAESA ports under the auspices of the ministry of transport (Djibouti, Sudan) Regulatory body with TPA,SUMATRA Regulatory Body in Kenya has to be set up South Africa Independent port regulator can be seen as a model. Further institutional reforms are required in many ports

Safety and Security Arrangements All PMAESA ports surveyed have achieved ISPS code approval Closed Circuit Television( CCTV) Container Scanning Automated Port Access Are also reported

Do You Have Any Questions? Thank you for your attention